Understanding the Capital One Credit Card & Spotify Partnership

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This is an expired offer. Capital One no longer offers Spotify with the Quicksilver Card.

The music streaming war is heating up as a growing number of streaming services vie for more than 100 million subscribers. It’s no surprise then that one of them, market leader Spotify, has partnered with one of the top credit card issuers as a way to capture more subscribers. The partnership, announced in May 2017, is with Capital One, specifically the Capital One Quicksilver card, and runs through April 2018. The deal offers Quicksilver cardholders 50 percent cash back on a Spotify Premium subscription.

How Spotify Works

Spotify is a Swedish-born music and video streaming service launched in October 2008. Its “freemium” pricing structure allows users to access basic and limited streaming features for free, while charging tiered prices for higher levels of music quality and streaming for paid subscribers.

Users can search for music based on artist, record label, and genre, while creating playlists that can be edited, played on most devices, and shared on social media. Spotify offers paid subscribers access to more than 30 million songs. As of January 2018, Spotify has more 140 million active users, about half of which are paid subscribers.

Although Spotify’s subscriber base currently dwarfs competitors such as Pandora, the fierce competition for subscriber growth has put downward pressure on profits. In the last two years, four new subscriber services have been launched.

Mega-competitors such as Apple and Amazon, which have smaller subscriber bases, can outspend Spotify without regard for profits. Amazon especially, with 90 million Prime members worldwide, may be Spotify’s biggest threat for dominance.

This might be why Spotify is looking to partnerships, like it has with Capital One, to expand its subscriber base. Spotify would like to capture as many new subscribers as possible ahead of its initial public offering in March or April 2018.

How the Capital One and Spotify Partnership Works

The Spotify offer is available to new and existing Capital One Quicksilver cardholders, including Quicksilver Rewards and QuicksilverOne Rewards. Ca﻿rdholders can go on the Spotify website or use the Spotify app to subscribe to its premium service.

Of course, the deal is also open to any Spotify subscriber who has or obtains a Quicksilver credit card. When the monthly payment is made using a Quicksilver credit card, Capital One automatically reimburses half the subscription cost as a cash-back credit. It’s as simple as that.

The Capital One and Spotify deal is available for all Spotify premium tiers, including the Spotify Premium ($9.99/month), Spotify Premium for Family ($14.99/month), and Spotify Premium for Students ($4.99/month). That means student subscribers will pay less than $2.50 per month for the service. Quicksilver cardholders can sign up through April 30, 2018, for the deal.

Both QuicksilverOne Rewards and Quicksilver Rewards cardholders will also receive 1.5 percent cash back on the subscription purchase. Quicksilver Rewards has no annual fee and is currently offering a signup bonus of $150 cash back when you spend $500 in the first three months. QuicksilverOne Rewards has no signup bonus and charges a $39 annual fee.

A True Win-Win-Win

This isn’t just a great deal for Capital One and Spotify though. Spotify wins by gaining access to Capital One’s expansive customer base. Capital One wins because the $60 it spends reimbursing an individual premium subscriber is far less expensive than the typical $250 in marketing it spends to acquire a single customer. And, of course, Spotify and Capital One customers win with a substantial 50 percent savings.

Don’t be surprised if you see similar Spotify partnerships pop up – or even one of Spotify’s competitors and another credit card company.

Author: Jeff Gitlen

Jeff Gitlen is a graduate of the University of Delaware. He writes about a wide range of financial topics including student loans, credit cards, small business financing, and more. His work has been featured on a number of sites including Bloomberg, CNBC, Forbes, Market Watch, and more.

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